Foord International Feeder Fund

Monthly Commentary – September 2020

• Developed market equities (-3.4%) retraced from a five-month rally that had been ignited by a robust recovery in many high frequency economic indicators—on worries that high unemployment levels and expiring stimulus measures could weight on growth
• Global developed market sovereign bond yields fell modestly—at its mid-month meeting the US Federal Reserve signalled continued dovishness with no rate hikes expected until 2023
• The US dollar strengthened against the euro (-1.9%) and British pound (-3.4%)—the risk off sentiment bolstered the US dollar and Japanese yen (+0.5%), both viewed as safe-haven currencies
• After months of sizeable gains, precious metals including silver (-13.3%) and gold (-4.1%) retreated—while concerns about the sustainability of any rebound in demand and dearth of travel weighed on the oil price (-9.6%)
• The fund’s holding in leading gold and silver streamer Wheaton Precious Metals (-8.1%) and ETFS physical gold (-3.6%) detracted from performance on precious metals weakness—the S&P 500 hedges contributed the most to performance as that index fell
• The managers favour equities but continue to employ the fund’s S&P 500 hedges to mitigate risk and dampen probable volatility—the imminent US elections, increasing geopolitical tensions and early indications of rising COVID-19 infection rates in the US and Europe could each materially weigh on markets
• The rand (+1.1% vs the US dollar) gained materially against the dollar but lost ground latterly—on risk off sentiment as fears of renewed European COVID-19 lockdowns mounted

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